Netflix Reduces Video Quality in More Countries to Handle Surge

(Bloomberg) -- Netflix Inc. is reducing video quality in India, Australia and some Latin American countries following conversations with internet service providers and governments, according to a person familiar with the matter.

Netflix operates the world’s most popular paid-TV network, and is the second-biggest driver of internet traffic in the world. Alphabet Inc.’s YouTube, the biggest traffic hog, reduced its default video quality around the world this week.

Governments are concerned about preserving internet access for hundreds of millions of people stuck at home due to the coronavirus. Video streaming, one of the biggest strains on the web infrastructure, has boomed in recent weeks after governments across the world ordered people to remain at home.

Netflix streaming traffic hit an all-time high on AT&T Inc. networks, the telecommunications giant said, while music-video streams climbed 7% last week in the U.S., according to Nielsen.

European Push

Europe started the push to rein in video streaming. Netflix, YouTube, Amazon.com Inc.’s Prime Video and Walt Disney Co.’s Disney+ all pledged to reduce their bandwidth consumption in Europe after conversations with government officials. YouTube has since enacted its policy worldwide as a precautionary measure.

Netflix isn’t following suit just yet, said the person, who asked not to be identified due to the sensitivity of conversations with government officials. Instead, it is acting on a case-by-base basis after conversations with regulators and internet service providers. India, one of the countries where Netflix reduced the so-called bit rate, has ordered its citizens to remain at home for the next 21 days to contain the spread of a virus that has killed more than 20,000 people worldwide in the past couple of months.

Both Netflix and YouTube already adjust users’ video quality based on the strength of their internet connection. Users watching video over a poor connection will get lower quality so that the stream isn’t interrupted. But the companies are now reducing the video output even for those customers with robust internet access.

There isn’t yet evidence that internet service providers or their customers are suffering widespread outages or poor service. Netflix users experienced temporary outages across the U.S. and Europe on Wednesday, though it wasn’t clear if that was related.

©2020 Bloomberg L.P.